The difference between a 2 percent and a 2 percentage point cut in payroll taxes

I'm a bit annoyed that even Ezra Klein is referring to the tax deal as containing a temporary "2 percent cut in the payroll taxes paid by employees." The cut will apparently reimburse $120 billion a year. This implies that it's a 2 percentage point cut and not a 2 percent cut (as the later would imply that we're paying $6 trillion a year in payroll taxes).

Quick explanation of the difference:

Let's say you paid 10% of you income in payroll taxes and you have an income of $30k a year. In that instance, there's a tenfold difference between the two forms of cut.

• A 2 percent cut would mean that you will be paying a rate of 9.8% or $2940. A saving of $60.
• A 2 percentage point cut would mean that you will be a rate of 8% or $2400. A savings of $600.

For the record, I'm picking on Klein because I count on him to get this sort of thing right even when the rest of the media doesn't. This isn't a matter of technical jargon, other terms could be used, but the public at large may rightfully take 2 percent to mean trifling, it isnt't.

[Update: Moved the bit about $6 trillion from the last paragraph to the first. I did it a minute after posting, so I'm not using the strikeout/[] notation I normally do for edits.]